Delayed go-ahead for drinks merger

A soft drinks merger of Robinsons and Irn-Bru has been backed by the competition watchdog - four months after the deal went flat.

The Competition Commission said the brands owned by Britvic and AG Barr were not close competitors and consumers would not lose out.

But the planned £1.4 billion tie-up lapsed in February because of delays caused by the Office of Fair Trading's decision to refer the matter to the Commission.

The two companies continued to work on gaining regulatory approval but Britvic indicated that a fresh agreement was far from certain.
Chairman Gerald Corbett said: "Our company is in a different place to last summer when the terms of the merger were agreed. The cost savings from merging are less, we are performing better, we have new management and we have a new strategy to deliver good growth internationally, as well as in the UK."

The latest findings from the Commission are provisional and the two companies are barred from announcing a new merger until the final report in late July.

In February, the OFT's decision to refer the merger drew an angry response from Mr Corbett, who said at the time: ''If this is industrial policy, I am a Frenchman. This is about two British companies getting together to take on Coca-Cola. The winners today are cracking open bottles of champagne at Coca-Cola in Atlanta, Georgia.''

Irn-Bru owner AG Barr also makes Tizer and Rubicon. The company, which is based at Cumbernauld, North Lanarkshire, and has more than 1,000 employees, has produced Irn-Bru from a secret recipe for more than 130 years.

Retail sales of soft drinks in the UK amounted to £11.2 billion last year and Commission deputy chairman Alasdair Smith said that, given the size of the market, it was important to examine the likely effects of the merger. He said: "Carrying out a full investigation gave us the chance to look in detail at consumer preferences. These told us that most consumers tend to see Barr and Britvic brands as distinct products rather than as close substitutes."

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